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Shorting profitably requires having a specific timeline for when oil stocks will be priced lower than today. You can't (profitably) just short something you th
by throwappp 11y ago
Shorting profitably requires having a specific timeline for when oil stocks will be priced lower than today. You can't (profitably) just short something you think will be lower at some point in the future. You have to know when.
- nickff 11y agoYou can short sell over a term of years, usually at interest rates of ~1% (but varying depending on the company).[1] If you believe that there is even a 20% chance of a company going bankrupt over the course of the next 5 years, placing the bet will only cost you 5%-6% of your potential winfall, so your expected ROI is 15%. Commodity futures can also be purchased a few years out, as can options. [1] https://en.wikipedia.org/wiki/Short_(finance)#Short_selling_terms https://en.wikipedia.org/wiki/Short_(finance)#Short_selling_...